Apple Makes Major Concessions on Third Party App Store Fees in the EU

And the wall comes tumbling down: Apple today agreed to replace its anticompetitive Core Technology Fee in the EU with a more reasonable 5 percent commission on transactions that occur within apps distributed outside its App Store.

“Under this new model, Apple will charge a commission on the sale of digital goods and services,” the Apple announcement explains. “The Core Technology Fee, a per-install fee for developers that achieve extraordinary scale, will be replaced by the Core Technology Commission, a simple 5 percent commission on digital transactions in apps distributed outside the App Store. The new terms also eliminate the initial acquisition fee and store services fee.”

We can thank EU regulators and lawmakers for these changes: Apple was forced to allow developers to distribute their apps in alternative app stores and via the web if desired, but it tried to make doing so prohibitively complex and expensive, as it has in the U.S. and elsewhere, to maintain its undeserved App Store fees. But that behavior was found to violate the EU’s Digital Markets Act (DMA), and rather than face ongoing fines and sanctions, the consumer electronics giant decided to finally work with regulators, as I’ve suggested for years, following Google for a change.

The new terms are still ridiculous, but this change lets Apple collect some fees and recoup some of the revenues it might otherwise have lost entirely. Granted, it had to be fined €500 million for its App Store violations for violating the DMA with its anti-steering policies–and then appeal that ruling and lose–before it finally woke up. But light dawns eventually.

“The Commission welcomes Apple’s changes to their business terms, which follow a close dialogue,” a European Commission statement explains. “Following today’s announcement, the Commission will monitor Apple’s effective implementation of the new terms.”

In addition to the alternative app store changes, Apple is lowering its fees for developers that use alternative payment systems to 20 percent or, for small businesses, 10 percent. It also eliminated its initial ‌acquisition ⁠and store services fees, which were always nonsense invented out of thin air.

The changes go into effect on October 1 and obviously only impact apps distributed and used on Apple’s devices in the EU, though it has similar programs now in Brazil and Japan, too, also thanks to regulation.